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Business Automation: Costs & Benefits

Marketing Team - Wednesday, April 02, 2014

  Business Automation, Your Automation
Shoots Down Labor Costs


Introduction

 

Recently, I saw a cartoon of a man charging into battle with a sword exclaiming he didn’t time to meet with a salesman. The salesman was trying to sell him an automatic weapon. While the cartoon related to revenue performance I quickly realized it could apply to solution selling also.

I fight the same battle every day. Every day I am told by Accounts Payable and Human Resource managers that they are too busy to meet to discuss automation. They don’t have the money to invest on automation. Their current tools are adequate to meet their present day needs.

The Business Encounter
The other day I talked with a friend about her new position with an international non-profit which will remain anonymous. This non-profit entity provides a range of significant services to the community and maximizes use of its donor dollars. However, as I listened to her, I wondered how many more customers it could impact if they increased their business efficiency.

Let me explain. “Tammy” processed the applications for families needing the non-profit’s services, and as she outlined the process I could understand her frustration and challenges that she faces.

I won’t outline the process here because it would turn this blog into a novella but, to say the least, the application process was very labor intensive, with at least eight manual steps and four people involved, while Tammy acted as the “paper chaser.”

She explained her frustration stemmed from having to compile and manage a 30-page file, and also when clients called to learn the status of their applications, she would literally go from office to office seeking down the file.

She said for every check up call that came in, she would spend a minimum of 15 minutes to find the file and try to discern where it was in the process. But when I suggested automation could ease the application burden significantly, she gave me the pat response of “Oh we can’t afford that.” I asked, how do you know? Have you evaluated your time?

So I guided her through a quick evaluation of her time.

1. File Assembly: She spent an average of 30 minutes assembling the package and hand keying the information into their database.

2. Application Processing: She made $15 per hour. So $7.50 per application on “Step 1.” She processed between 15 and 25 applications a week or $112 per week.

3. Manual Work Process: She said moving the application through the process she touched the application at least 15 times and spent about two hours per week per application or a minimum of 30 hours per week on all applications.

4. Other Tasks: Based on her salary, this is equivalent to $450 per week. That doesn’t include the time she spent tracking down the application making sure it was moved through the process, copying and printing and keeping the clients updated. It also doesn’t include the time the other staff manually worked with the application.

5. Opportunity Costs: What would happen the number of hours spent on the applications was reduced by 50 percent? What other productive work could she do?

Tammy explained she used to plan and manage their fundraising events. She said fundraising had fallen to the back burner because her time was redirected to processing applications.

Results
I provided her with the numbers of what costs would be reduced through business process automation. With just her simple labor numbers the Return on Investment was 35 weeks. In less than 9 months the system would have paid for itself. I could see excitement build when she realized automating was actually a savings and not an expense.

Then began the ripple effect--She started calculating in her head how many more people they could help by speeding up the process; how she could free up her time to plan events the part of her job that she truly enjoyed; what other departments could benefit from the system.

All it took was a 15 minute conversation. Not to sound too much like that insurance commercial but really if 15 minutes could save you 50 percent why wouldn’t you do it?

 

Sallylyn M. Hill
Western Integrated Systems
858 West Elliot Road, #104
Tempe, AZ 85284
Sallylyn.hill@westint.com
Phone (480) 603-0538 ext 26 or (866) 736-2191 Ext 26

 

 

 

 

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